chapter  2
17 Pages

Potential obstacles for competition in the financial sector JACOBA. BIKKERANDMICHIEL vA NLEUvENSTEIJN

This chapter discusses structural problems that undermine competition on financial markets, using a diagnostic framework which considers demand and supply side characteristics. Potential impediments to competition are concentration, entry barriers, lack of transparency, product complexity, switching and search costs, financial illiteracy, lack of consumer power and weak intermediaries. In response to such financial market failures, we suggest a number of possible policy measures. Further, the ambiguous relationship between competition and financial stability is addressed.